Promising lift for industry helps US jobs

I am City A.M's deputy editor, having joined the newsroom in late 2010 as an economics reporter.

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Julian Harris

INDUSTRIAL growth in the US still offers hope for an economic recovery, a survey released yesterday indicated.

The ISM manufacturing index, which assesses the state of US industry, came in at 56.6 for November – displaying growth slightly above the rate expected by economists.

There was a large dip in the rate of production growth, which fell 7.7 points to 55. Yet the positive figure, over 50, still reflects a reasonable increase in production, after October recorded a huge increase of 6.2 points on September.

The pace of expansion in employment also eased slightly to 57.5 in November from 57.7 in October.

The result mirrored the results of the the ADP employment survey, which reported an increase in private sector employment of 93,000 from October to November.

And ADP also revised up the employment figures for October, showing an increase of 82,000. The data provide a boost for the economy, although some economists warned that increases would have to hit six figures per month in order to significantly improve America’s employment slump.

On Tuesday night Fed chairman Ben Bernanke spoke of the “social and economic” consequences of unemployment, which currently stands at 9.6 per cent. Almost 40 per cent of America’s unemployed have been out of work for over six months, he said. Yet more positive employment news came yesterday from revised Department of Labor figures.

The department said that the number of hours worked by employees increased by 1.4 per cent in the three months to September – up from the previous projection of 1.1 per cent.
Meanwhile construction spending rose by 0.7 per cent in October, surprising economists who had expected stagnation.